When “a little corruption” in Mexico goes too far

 “…modern Mexico has never functioned without corruption, and its current system would either collapse or change beyond recognition if it tried to do so.”
– Mexico-based business consultant Lawrence Weiner


“It’s no secret that corruption in Mexico significantly affects the United States, especially in our border states,” writes Paul Driessen. “And it’s probably no surprise to hear that corruption isn’t merely a disagreeable characteristic of the Mexican political system; it is the system.”

“A lifelong resident of Texas and Louisiana, Duggan Flanakin has seen this firsthand. His article should raise concerns everywhere, and spur action to root out the murderous corruption (though it probably won’t, considering the breadth, depth and viciousness of what Mexico and we are dealing with).”


When “a little corruption” in Mexico goes too far

Duggan Flanakin

“Corruption is not a disagreeable characteristic of the Mexican political system,” Gabriel Zaid observed in La economia presidencial. “It is the system.” 

It is widely known,” Mexican journalist Ricardo Ravelo wrote in June 2018, “how the General Administration of Customs … operates a network of officials linked to large-scale smuggling in the country’s 49 customs offices.” Under previous central administrators Aristotle Núñez Sánchez and Osvaldo Santin Quiroz, Mexico’s Tax Administration Service (SAT) became known for “…unleashing smuggling throughout the country.” 

Smuggling, said Ravelo, is a business that operates in Mexico without a containment dam, under the protection of senior officials at the SAT. Those close to the SAT high command, he added, rake in millions in cash distributed by large international smugglers, importers of Chinese fabrics and other goods. 

Ravelo further revealed that the SAT’s top people and the Ministry of Finance are well aware that organized crime controls arms, drugs and money trafficking through Customs. Moreover, they protect and shield corrupt officials like Guillermo Peredo Rivera, Central Administrator of Customs Operations at the SAT, whose story, Ravelo asserted, “has always been linked to corruption scandals.” 

Peredo Rivera, who has been described as a “violent, explosive and authoritarian man,” has been spared despite a criminal complaint of abuse of power and his role in covering up alleged sexual abuse by another Customs employee. He even earned the nickname “The Chocolate Master” for his role in signing documents without the proper credentials. 

Peredo Rivera has also long protected his protégés, including Edmundo Almaguer Contreras, who was accused of abusing his authority as a Customs official. Contreras’ wife just happened to work in the Central Administration of Customs Operation under Peredo Rivera. Recently, two more names can be added to the list: Juan Carlos Madero Lariós, a prominent advisor at the Tax Administration Service, and his supervisor, Luis Alfonso Lino Muñoz. 

In a recent article in U.S. News & World Report, Arcadia Foundation CEO Robert Carmona-Borjas called Madero Lariós “a major contributor to multiple crimes against Mexico’s government and its environment.” For example, he suggests, Madero Lariós –

* allowed the illegal export of large quantities of lumber to China, thus contributing to the ongoing and massive deforestation in the Mexican state of Chiapas; 

* contributed to the near-extinction of the endangered Mexican sea cucumber by allowing the animal’s unabated illegal export (again likely to China, where the animal is considered a delicacy); and 

* authorized the illegal discharge of 70,000 barrels of hydrocarbons by mislabeling diesel pipes as “light oil,” an action that robbed Mexico of tax revenues. 

Others have reported that Madero Lariós and Lino Muñoz have operatives in one or more of the 32 Naval Maritime Search, Rescue and Surveillance Stations (SEMAR) who provide cover for smuggling operations. Lino Muñoz has been called Madero Lariós’ “godfather” and is the Foreign Trade Assistant for Federal Tax Audits at Mexico’s Tax Administration Service. 

Mexico has a long history of mordida, greasing palms and operating under a system of “functional corruption” to get things done. In a 2013 article in The Atlantic, Mexico-based business consultant Lawrence Weiner flatly stated that “…modern Mexico has never functioned without corruption, and its current system would either collapse or change beyond recognition if it tried to do so.” 

Weiner noted that few private Mexican fortunes have been made without colmillo (“fang” or cunning) – the owner’s ability to cultivate ties to the right officials and master the art of “mutually convenient” relationships. The system, he asserts, is built on mutual distrust outside “…the family.” 

The result is that much of Mexico’s economy depends on monopolies and oligarchic cartels. 

But what happens if corruption has become destructive to Mexican society, even to its natural beauty? What can be done to turn things around? 

As Jude Webber reported in the Financial Times last year, the average bribe per person to public officials (including police and civil servants), as compiled by Mexico’s National Statistical and Geographical Information System (INEGI), rose from 2,273 pesos in 2017 to 3,822 in 2019 – equivalent to the monthly salary of 40 percent of Mexicans. 

Corrupt public officials and their criminal patrons are today negatively impacting two of Mexico’s greatest treasures: tourism and the natural resources that make Mexico so attractive. 

And so we must ask ourselves, Has Mexico moved beyond “functional corruption” into chaos? 

The typical “war” against public corruption in Mexico has been one group of corrupt officials discrediting their equally corrupt predecessors, with little if any reduction in theft. Thus, for Mexico to gain the world’s trust in its pursuit of effective anti-corruption strategies, the country must weed out corruption from within, without slowing its economy in the process. 

The widely reported, and even more widely speculated, crimes at the Tax Administration Service should have already provided leadership with the golden opportunity needed to highlight and root out public corruption by current Mexican officials.  

Yet, Madero Lariós remains in his position, as do his protectors. In March, he represented the Tax Administration Service at an event announcing the Joint Railway Dispatch that is expected to expedite trains crossing the U.S.-Mexico border between Eagle Pass and Piedras Negras. 

Opening up an investigation into the alleged and proven wrongdoings by public officials at the Tax Administration Service would shine light on major areas of public corruption. It would also send a signal to foreign governments and corporations that Mexico is finally getting tough on crime.

Duggan Flanakin is a policy analyst with four decades of experience with nongovernmental organizations, including projects with multiple Mexico-based NGOs.

9 thoughts on “When “a little corruption” in Mexico goes too far”

  1. Corruption in Mexico took a big jump with Nixon and Operation Intercept using the drug war as a weapon against people. Seeing the inevitable end of the drug war, climate change was created to take its place.

  2. … except that maybe their corruption is a bit less structured and professionally organized.

    Whistleblower reveals no one with honor or integrity “can survive inside the DC institutions”
    There are no honorable “rank and file”, that is a myth.
    After a lengthy and casual introduction and discussion, I was genuinely shocked at the severity of his warnings about the FBI, DOJ and various other agencies.

    However, in hindsight, after checking him out, I realized he was certainly a person to understand.

    4.) His warning was direct, devoid of emotion, very deliberate and very cold. But behind his eyes and words was a guy telling the truth; the quiet part that no-one inside the bubble says openly.

    5.) What he said was that not a single person of honor or integrity can survive inside the DC institutions we were discussing. The system itself is designed to remove them… All of them… every-single-one.

    6.) He laughed at the term “honorable” rank and file. But it wasn’t a snarky laugh; it was almost like a resignation laugh… a genuine look toward the sky and compassion for a view I held that his honesty would destroy.

    7.) He wasn’t bitter, angry or jaded; and I would not call him cynical. He was very genuine, very wise, held decades of knowledge…. and was a “just the facts” kinda Joe Friday guy.

    … and so on to
    20.) This is the place where people of honor and integrity are weeded out. They are a threat; or really not so much a threat, but just the “wrong type” of people. Said with a very matter-of-fact acceptance.

    21.) One of the key institutions who do the background checks is The FBI.

    That is why the FBI had to be compromised first in the structure of the new (post 9/11) system.

    22.) Once you realize there is only one party, the UniParty, the next step is to recognize there are no longer three branches within government.

    Then everything that has previously created frustration starts to make sense.

    23) The discussion about there no longer being three branches of government was an eye-opening part of the talk… But if you think about it, it makes sense.

    The executive, the legislative and the judicial branches all defer to the Intelligence Community.

    24) Here’s the exercise he sent me away with. If you doubt this thread, apply the scientific method to the hypothesis.
    Show me a single example where they don’t.


  3. and behind all the pollies?
    coca n guns before now its fentanyl from china as their criminals move in on the older gangs

  4. We have far more corruption, criminality, and elitism, destroying the U.S.A. than Mexico at this point! Our system has been destroyed and likely unfixable as every aspect of our government, our institutions, our healthcare, education, etc. are almost completely corrupted! Mexico may be far better than the U.S at this point in time …

  5. The corruption stems from a monolitical political structure of society without real competition between individuals themselves and the state . In Russia this process was tested on big scale after the revolution of 1918 and it ended with an enormous corruption and an enormous loss of life and talents in an enormous disaster . Mexico was ruled after their revolution by the PRI , the Party Revolutionar Institutional where each government could rule and steal for 4 years whereupon a new clan out of the oligarchy took over . In order to hide the massive scale of stealing the oligarchy used the large avocado-groves in the middle of the country as a bargaining-chip with large under the table payments to distribute the wealth in such a way that outsiders were not capable to register the amount of corruption . In principle the us founding fathers foresaw these problems and instituted a legal system that protected the providers of goods and services in such a way that there could never be less than 2 providers of a certain good or service . In recent years this has been successfully challenged by the Rockefellers , Bill Gates . Big pharma , Big tech and Big Banking leading to creeping corruption into US society and control over its secret services .
    All these players are supporting the democrats and hope to install a similar system , very beneficial to the 0,001 percent billionaires with the help of bioweapons “vaccines” . Let us hope that the USA does not end in a swamp of corruption . It is still fully in your hands and do not give it away to ruthless crooks .

  6. We have learned well in the US from Mexico’s corrupt system. The only difference is our corrupt system is more structured (deep state). How sad that the USA has come down to this. I hope Americans realize that the corrupt system here (deep state) will only continue to get worse and worse not better. My heart breaks for America. I pray and hope all is not yet lost and that we as a nation can pull ourselves up out of the cesspool we are now in.

    • You’re right, Benito. Pot calling the kettle black. Here in CA Gov Nuisance gave his largest campaign contributors no-bid contracts.

      And speaking of Mexico, what segment of our intelligence “community” do you think runs the drug traffic import into the US from Mexico?

      Last time I was in Mexico I had binoculars & everyone wanted to know if I was working for “Seeya” (CIA). They’re accustomed to Seeya trying to stamp out local competition.

      Drugs excepted, “smuggling” is usually avoidance of WTO restraint of trade.

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